One of the most essential aspects of running a business is debt. In fact, borrowing money is considered a vital part of a business' growth. Many companies that recognize this offer financial products to grow alongside small and medium enterprises. However, with rising default rates and digital fraud attempts, how should a financing company assess its risks when lending to SMEs in the Philippines? How do we bridge the gap between recognizing a client's business potential and identifying the risks of lending to them in order to establish a synergistic partnership?

In 2019, the Philippine Statistics Authority listed over 1 million active business enterprises in the country. Based on 2020 research by TransUnion, meanwhile, digital fraud targeting financial services is rising rapidly. As more businesses are established, financing institutions have to grow with them to stay relevant and keep up with industry trends and innovations. Risk analysts have to be able to keep up with changes in their environment, especially those attributed to external factors like the pandemic or digital fraudsters. Establishing the appropriate risk for each client is the healthiest foundation you can have for a partnership. When you contextualize and tailor-fit your solutions to your clients, you are able to capture the whole image of your client's business. Rather than conservatism in lending, you are able to see the risks associated with your decisions and create the most risk-conscious decisions.